Harlem was originally a Dutch village founded by Governor Pieter Stuyvesant in 1658. The area that is present day Harlem consisted of a small village, a large estate owned by the Roosevelt family (long before there was a president Roosevelt), farms and wilderness into the early 1800's. By the late 1830's, Harlem started to develop as a residential neighborhood. The development was sparked by the opening of the New York and Harlem Railroad, which made thecommute to the “city” easier for residents of Harlem. When the IRT subway was built in 1879, Harlem became a wealthy residential suburb.
The real estate boom surrounding the development of Harlem as a wealthy suburb was followed by a severe real estate slump due to a nation wide economic depression. When the depression ended, development began at a pace never before seen in New York and just about every square inch of Harlem was covered with row houses and tenement buildings. Then the subway began to develop even further, which caused a mass exodus from Harlem to the outer boroughs and the suburbs. The exodus left many of the tenement buildings vacant for years. Eventually, the owners of the buildings rented to black people who were looking for better accommodations then could be found downtown or had been displaced by the building of Penn Station.
There was very little private development in Harlem after this infusion of black residents in the early part of the 20th Century. The lack of development in Harlem was caused by two main factors. First, almost all the land in Harlem had already been developed.
Second, the discriminatory policies of most banks resulted in the rejection of mortgages for new construction in a black neighborhood.

The exception to this situation was in Hamilton Heights and Sugar Hill where middle class blacks and whites continued to live until the late 1930's when these areas became dominated by middle class and wealthy black residents.

Fortunately for people interested in Harlem, the result of the lack of development is that a substantial portion of Harlem’s historic architecture remains. Therefore, people interested in buying property in Harlem have a wide range of options. Many of the older buildings, houses and tenements have deteriorated and are ripe for restoration, but many of the row houses were lovingly cared for or restored to their original glory.